VW Battery Plant in Ontario to Cost More Tax Dollars, Create Fewer Jobs
OTTAWA—Volkswagen’s upcoming electric vehicle battery plant in St. Thomas, Ontario will cost the Canadian government more money and create fewer jobs than expected.
That’s according to Parliamentary Budget Officer Yves Giroux, whose role is to provide independent economic and financial analysis to the Senate and House of Commons. This includes estimating the financial cost of any proposal over which the government has jurisdiction.
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Giroux estimates the financial contribution from Ottawa to Volkswagen’s battery plant will end up at around $16.3 billion.
On April 21, the Trudeau administration announced up to $13.2 billion in subsidies over 10 years.
The Parliamentary Budget Officer says the government failed to include more than $3 billion it will have to pay the German automaker in order to match the aggressive incentives offered by the U.S. to drive clean energy investments, which Canada pledged to do.
Ottawa has to counter the so-called Inflation Reduction Act (IRA) with generous incentives of its own.
Fewer Jobs
Giroux also claims the economic benefits won’t be as great as anticipated, especially when it comes to labour.
While Ottawa has promised up to 3,000 new jobs with Volkswagen’s battery plant in Ontario, he believes just 1,400 jobs will be created once the facility is up and running.
“The economic benefits tied to the plant’s construction are essentially marginal,” Giroux says.
As a reminder, Canada wants 100 percent of new passenger vehicles available for sale in the country to be zero-emission by 2035, including plug-in hybrids and pure electric vehicles.